Can I get first homeowner assistance if I’m building my first home?

Yes – first homeowners can apply for several government assistance grants and schemes, including schemes that guarantee a first home mortgage deposit and rebates for the cost of stamp duty in some states. The First Home Owner Grant offers a lump sum to help with the cost of the deposit, and the First Home Loan Deposit Scheme helps first-time builders with the cost of the deposit. Use Savvy’s stamp duty calculator to work out how much you’ll be required to pay depending on what state you live in.

Is it cheaper to build a house or buy one that’s just been built?

It can be cheaper to buy an undeveloped block of land and build on it, rather than buy a home that’s just been built. This is because if you buy undeveloped land, you’ll only pay stamp duty on the cost of the land, whereas if you buy a completed house, you’ll pay stamp duty on the cost of the land plus the price of the home built on it, so you’ll end up paying far more. Off-the-plan constructions also save you money because you only pay stamp duty on the price of the land and costs are naturally lower anyway.

Is it difficult to get a fixed-price contract with a builder?

No – it isn’t difficult to get a fixed-price contract as opposed to a cost plus contract (which means the builder produces invoices to prove expenditure as the project goes along, rather than working to a fixed price for all items from the beginning of the project). You should be aware that fixed-price building contracts need to be highly detailed, specifying down to the tiniest details the quality, make, model and colour of all fixtures and fittings and appliances used in the construction and building process.

What if I can’t negotiate a fixed-price contract with my builder?

Sometimes it may not be possible to get a fixed-price contract with a builder. Instead, you’ll be provided with a cost estimate. Builders do this to protect themselves against unforeseen circumstances such as variations in the cost of labour or building materials. If you can’t get a fixed-price contract, you’ll need to be approved for a cost plus construction loan, also known as a variable construction loan. These loans allow for variation in the cost to build the home within specified, pre-defined limits.

Do many lenders offer construction home loans in Australia?

Yes – there’s a great deal of competition between lenders for loans for construction purposes, so it’s well worth comparing loans with Savvy to make sure you find a construction loan which perfectly suits your needs. The best construction loans in Australia with the lowest interest rates are to be found by carefully comparing a wide range of loans from different lenders.

Are delays to be expected during the home building process?

Yes – on average, it takes between six and 12 months to build a standard three-bedroom home, but units and apartments may take longer if they’re part of a block or tower with multiple levels to build. Construction delays are commonplace in the building industry, so you should prepare for them and make sure your lender gives you plenty of time to get the building works completed.